A:
a. discount rate.
b. tax rate.
c. inflation rate.
d. riskfree rate of return.
Answer: C
Since the real rate of return measures the investor's rate of return in excess of the inflation rate.
RELATED FAQS

The real rate of return is the amount of interest earned over and above the?
The real rate of return is the amount of interest earned over and above the: a. discount rate. b. tax rate. c. inflation ... Read Answer >> 
At yearend 2004, the Federal Reserve reported moderate economic growth of 3% ... ...
The correct answer is c). The real interest rate, also referred to as the inflationadjusted return, factors the eroding ... Read Answer >> 
How is the expected market return determined when calculating market risk premium?
Find out how the expected market return rate is determined when calculating market risk premium and how these figures are ... Read Answer >> 
What can cause the rate of return to be negative?
Learn how poor company or sector performance, economic turmoil and inflation can cause the rate of return on an investment ... Read Answer >> 
How is the riskfree rate of interest used to calculate other types of interest rates ...
Learn how the riskfree rate is used to compare the yields on bonds, and understand how Tbills are used as a proxy for the ... Read Answer >> 
What two components are used to calculate riskadjusted return? I ...
The correct answer is b. Standard deviation and the riskfree rate of return are used to calculate or measure return based ... Read Answer >>
Related Articles

Investing
RiskFree Rate of Return
The riskfree rate of return is the theoretical rate of return of an investment with zero risk. The riskfree rate represents the interest an investor would expect from an absolutely riskfree ... 
Managing Wealth
How Interest Rates Affect Property Values
Along with their impact on mortgages, interest rates affect capital flows, the supply and demand for capital, and an investorâ€™s required rate of return. 
Investing
More Ways to Evaluate Portfolio Performance
The Jensen measure is another tool investors use to include risk when measuring portfolio performance. 
Investing
How Interest Rates Affect Property Values
When interest rates fall, real estate prices tend to increase. Why? Find out here. 
Financial Advisor
A Guide on the RiskAdjusted Discount Rate
When a project or investment faces higher amounts of risk or uncertainty, it may be appropriate to utilize the riskadjusted discount rate. 
Financial Advisor
Measure Your Portfolio's Performance
Learn three ratios that will help you evaluate your investment returns. 
Insights
10 Countries With Lower Interest Rates Than the US
Learn about the 10 countries with lower interest rates than the United States and how interest rates indicate a country's economic outlook. 
Investing
How to Calculate Required Rate of Return
The required rate of return is used by investors and corporations to evaluate investments. Find out how to calculate it. 
Investing
What are Excess Returns?
Excess returns are investment returns that exceed a benchmark or index with similar risk.
RELATED TERMS

RiskFree Return
The theoretical rate of return attributed to an investment with ... 
InflationProtected Security  IPS
A type of fixedincome investment that guarantees a real rate ... 
Nominal Rate Of Return
The amount of money generated by an investment before expenses ... 
AfterTax Real Rate Of Return
The actual financial benefit of an investment after accounting ... 
Timeliness
A proprietary rating system used to rate stocks while taking ... 
InflationProtected Annuity  IPA
An annuity investment that guarantees a real rate of return at ...